Why Facebook is not going to be a VC in Africa

Facebook may be scaling up its operations in Africa and engaging more intently with tech startups on the continent, but the company has decided it will not be making any direct investments.

Facebook has been getting increasingly involved in the African startup space, most recently launching its NG-Hub space in Lagos, while its Fbstart accelerator and a variety of challenges have been opened for African companies.

Chief executive officer (CEO) Mark Zuckerberg is also an investor in Africa, with the Chan Zuckerberg Initiative being a backer of Andela, but Facebook itself will not be making any direct investments in tech startups on the continent.

That is according to Julien Decot, director of platform partnerships for EMEA at Facebook, who was speaking at last week’s MEST Africa Summit in Cape Town. He said the decision not to become an investor had come straight from Zuckerberg himself.

“That was a Zuckerberg decision. The way Mark thought about it was – “this is not what we do. We have a mission that’s broad and large and complicated enough”. We’re not in the business of trying to become a VC. There are many other things we can do at scale, and potentially do well,” Decot said.

He said Facebook stood to benefit in many ways from making that decision, even though it is scaling up its work with startups in other ways.

“We can be pretty unbiased in many ways. We’re unbiased in terms of which tech people are going to use, we’re not wedded to them using our tech. We’re not wedded to the type of funding. We can really be a catalyst, which is very much the word I would use to describe our role,” said Decot.

The whole point of Facebook’s activities is to ensure African developers and entrepreneurs are able to use the company’s platforms in order to provide relevant services, he said.

“For people to use our service, we are not going to invent the service people are going to use. They are really just platforms, and the services that people will use on the top of them with be built by people on this continent,” said Decot.

“The wave of innovation in Africa will come from small companies rather than big corporates.”

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.